A fresh Bloomberg report argues that Bitcoin is readying for a monumental bull run similar to 2017’s crypto rally. This comes as Bitcoin is maturing as an asset, and the crash of traditional financial markets opens doors for adoption.
Bloomberg report says Bitcoin is maturing
The report is question – with the bullish name “Bitcoin Maturation Leap” – is Bloomberg’s latest take on the crypto market. First and foremost, the report notes that Bitcoin was born out of the last financial crisis, the Great Recession. As such, it could potentially thrive during these uncertain economic times.
Toshi Times recently covered how Oxford University researchers similarly argue crypto becomes more important than ever during financial turmoil. Moreover, investor Anthony Pompliano recently said Bitcoin could soon embark on a 1,420% bull run to $100,000.
Bloomberg’s report states that Bitcoin is “down less than a quarter as much as the S&P 500 in 2020, despite being almost 5x as risky” from a volatility standpoint. Moreover, the publication also suggests fallout from the COVID-19 coronavirus pandemic is separating the wheat – Bitcoin – from the chaff:
“Coved-19 distinguishes Bitcoin from [the] rest of cryptos. The macroeconomic effects of the coronavirus accelerate Bitcoin’s process of gaining value relative to other cryptos.”
Bitcoin in “gold-like transition process”, volatility about to fall
Additionally, the report suggests Bitcoin is inching closer to become “digital gold”, i.e. immune to negative market shock. For example, the following Bloomberg chart demonstrates that Bitcoin is reaching its closest 52-week correlation to gold since 2010.
As such, the Bloomberg article argues that Bitcoin is now reaching maturity. Moreover, it states that the introduction of Bitcoin futures was important in taming the “raging Bitcoin bull market”:
“The advent of listed futures helped tame the raging Bitcoin bull market, and we believe [it] is part of the gold-like transition process in the benchmark crypto. Increasing futures open interest and volume represent adoption – key for the nascent digital asset with limited supply.”
Furthermore, the report goes on to suggest that Bitcoin volatility will continue to decrease. Although this is in line with the notion of Bitcoin truly becoming “digital gold”, it is nonetheless notable.
The premier cryptocurrency’s all-time low volatility in late 2015 was seen as “the beginning of the bull market” culminating in 2017’s legendary bull run rally. As such, Bitcoin could be approaching a similar inflection point as its 2017-like leap.
Bloomberg’s crypto piece also notes that Bitcoin currently carries a “discount” when taking on-chain indicators into account. Put simply, this means that Bitcoin is technically undervalued:
“Bitcoin appears to be discounted vs. its primary on-chain indicators. Representing adoption, the 30-day average of active addresses has stabilized closer to $9,000 vs. about $6,600 on April 2.”
Finally, Bloomberg’s market article highlights that central banks could be about to enter the crypto space. Specifically, it speculates that central banks could compete directly with private companies, such as Facebook’s struggling Libra initiative. This is already happening, as China is beginning trials of its “digital yuan” in four cities.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.